May 25, 2020

Poland – New Laws on Garden Leave and Fixed Term Contracts

A draft Bill was filed by the Government with the Polish Parliament on 10 April. The Bill proposes changes to the Polish Labour Code and related laws, mainly as regards 1) fixed term contracts and their termination, and 2) for the first time, the introduction of the concept of garden leave into the Labour Code.

Fixed term contracts 

Current regulations 

  • There are no statutory limits on the duration of fixed term contracts, though certain restrictions have been imposed via caselaw.

  • There are no limits on the number of fixed term contracts; however, entering into a third successive fixed term contract is considered akin to entering a permanent contract.

  • The notice period for a fixed term contract is 2 weeks, if 1) the contract is for at least 6 months and 2) the contract provides for termination part way through (other than for summary dismissal).

Proposed regulations 

  • A fixed term contract may be concluded for a maximum of 33 months (whether as one or multiple contracts between the same parties). Any longer contract will convert into a permanent contract after that time.

  • If more than 3 fixed term contracts are concluded the 4th shall count as a permanent contract. Bizarrely, that appears to be the position even if there is a break, perhaps of many years, between the 3rd and 4th contracts.

  • The notice periods for fixed term contracts will be the same as for permanent contracts i.e. should depend on the length of service with the employer and be at least (i) 2 weeks – if employed for less than 6 months, (ii) 1 month – if employed for at least 6 months, (iii) 3 months – if employed for more than 3 years.

Garden Leave  

Currently “garden leave” is not expressly regulated in the Polish Labour Code but it is nonetheless widely accepted in practice. In general garden leave requires the employee’s consent.   The proposed regulations authorise the employer to unilaterally release the employee from the obligation to perform work, i.e. send him on garden leave upon payment of his salary and any benefits regardless of his own views on the matter.

 

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 Małgorzata Grzelak Labor and Employment Attorney Squire Patton Boggs
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Małgorzata Grzelak’s practice focuses on labor and employment, corporate and real estate issues. She advises clients in the energy industry, hotel industry, commercial and service sectors, and various other industries. 

Małgorzata provides advice to investors outside Poland in the course of their commercial activities on investment processes including all aspects of setting up a business presence in Poland, acquisition or leasing of real estate, structuring of labor and employment relations, immigration, and various corporate and contract law...

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